A) ABSTRACT / HEADNOTE

This case addresses the legal validity of an FIR and charge sheet filed against A.M. Mohan (Accused No. 3) under Section 420 read with Section 34 of the Indian Penal Code (IPC) for cheating and conspiracy. The Supreme Court quashed the criminal proceedings on the ground that neither the FIR nor the charge sheet disclosed the necessary ingredients to constitute the offence under Section 420 IPC, especially dishonest inducement. The decision reinforces the principle that criminal proceedings cannot be initiated to settle civil disputes or matters lacking prima facie criminal intent.

Keywords: Quashing, Cheating, Dishonest Inducement, Section 420 IPC, Abuse of Process, Section 482 CrPC.

B) CASE DETAILS

i) Judgment Cause Title:
A.M. Mohan v. The State Represented by SHO and Another

ii) Case Number:
Criminal Appeal No. 1716 of 2024.

iii) Judgment Date:
20 March 2024.

iv) Court:
Supreme Court of India.

v) Quorum:
B.R. Gavai, Rajesh Bindal, and Sandeep Mehta, JJ.

vi) Author:
Justice B.R. Gavai.

vii) Citation:
[2024] 3 S.C.R. 722 : 2024 INSC 233.

viii) Legal Provisions Involved:

• Section 420 IPC: Cheating and dishonestly inducing delivery of property.
• Section 34 IPC: Acts done by several persons in furtherance of common intention.
• Section 415 IPC: Definition of cheating.
• Section 482 CrPC: Inherent powers of High Court.

ix) Judgments Overruled by the Case (if any):
None.

x) Case is Related to Which Law Subjects:
Criminal Law, Procedural Law.

C) INTRODUCTION AND BACKGROUND OF JUDGMENT

The case arises out of an FIR alleging financial cheating by the appellant and co-accused. The appellant, A.M. Mohan, sought quashing of the FIR under Section 482 of the Code of Criminal Procedure, 1973, before the High Court of Madras, which was denied. Aggrieved by the decision, the appellant approached the Supreme Court. The Court examined the allegations to determine whether the criminal proceedings constituted an abuse of the process of law.

D) FACTS OF THE CASE

1. Alleged Transactions and Agreements:

   • The complainant, Karthick Krishnamurthy, extended financial assistance of ₹1.6 crore to accused No. 1 for real estate projects.
   • Multiple transactions occurred, including land sales, mortgage deeds, and power of attorney execution, to secure the amounts advanced.
   • ₹20,00,000 was transferred to the appellant, A.M. Mohan, allegedly at the instance of accused No. 1.

2. Cheating Allegations:

   • The complainant accused the appellant and others of cheating by misrepresenting facts and failing to honor the agreements.
   • The appellant executed a sale deed in favor of accused No. 1 but was alleged to be complicit in the broader conspiracy.

3. Filing of FIR and Charge Sheet:

   • An FIR was registered against the appellant under Section 420 read with Section 34 IPC.
   • Subsequently, a charge sheet was filed, reiterating allegations of dishonesty and fraud.

E) LEGAL ISSUES RAISED

i) Whether the allegations in the FIR and charge sheet disclose the ingredients of Section 420 IPC against the appellant?
ii) Whether the High Court erred in rejecting the quashing petition under Section 482 CrPC?
iii) Whether the appellant’s involvement constituted criminal culpability or was merely a civil dispute?

F) PETITIONER/APPELLANT’S ARGUMENTS

i) Lack of Inducement and Dishonesty:
The counsel argued that neither the FIR nor the charge sheet alleged that the appellant induced the complainant dishonestly to deliver property, as required under Section 415 IPC. The transaction was initiated at the instance of accused No. 1, and the appellant merely executed the sale deed after receiving ₹20,00,000.

ii) Civil Nature of Dispute:
The transactions pertained to financial agreements and contracts, making the case a civil dispute rather than a criminal matter.

iii) Abuse of Process of Law:
The initiation of criminal proceedings was contended to be a misuse of the criminal justice system for resolving civil claims.

G) RESPONDENT’S ARGUMENTS

i) Prima Facie Case Established:
The respondents argued that the FIR disclosed cognizable offences, as the appellant was part of a conspiracy involving cheating and fraudulent transactions.

ii) Charge Sheet Validity:
Since the charge sheet had been filed, the appellant’s remedy lay in seeking discharge rather than quashing the FIR.

H) RELATED LEGAL PROVISIONS

i) Section 420 IPC: Requires proof of cheating with dishonest intention and inducement leading to delivery of property.
ii) Section 415 IPC: Defines cheating, emphasizing fraudulent or dishonest inducement.
iii) Section 482 CrPC: Empowers courts to prevent abuse of process and secure justice.

I) JUDGMENT

a. Ratio Decidendi:
The Supreme Court held that:

1. The FIR and charge sheet lacked allegations of dishonest inducement or fraudulent intent against the appellant.
2. The appellant merely executed a sale deed after receiving ₹20,00,000, with no subsequent involvement in alleged wrongful acts.
3. The proceedings constituted an abuse of process as they arose from a civil dispute.

b. Obiter Dicta:
The Court deprecated the tendency to misuse criminal law for resolving civil disputes, emphasizing the importance of judicial discretion under Section 482 CrPC.

c. Guidelines:

1. Courts must scrutinize allegations to prevent misuse of criminal law in civil disputes.
2. Criminal culpability under Section 420 IPC requires proof of dishonest intention at the time of inducement.

J) CONCLUSION & COMMENTS

This judgment underscores the fine line between civil disputes and criminal offences. The Court’s decision to quash the proceedings reflects its commitment to protecting individuals from vexatious litigation while preserving the sanctity of the criminal justice system.

K) REFERENCES

1. Indian Oil Corporation v. NEPC India Ltd. (2006) 6 SCC 736.
2. G. Sagar Suri v. State of U.P. (2000) 2 SCC 636.
3. Prof. R.K. Vijayasarathy v. Sudha Seetharam (2019) 16 SCC 739.
4. Anand Kumar Mohatta v. State (NCT of Delhi) (2019) 11 SCC 706.
5. Haji Iqbal v. State of U.P. (2023) SCC OnLine SC 946.